On paper, fractional ownership might sound very similar to timeshare ownership, but is it really? While they both allow buyers to share ownership of a vacation property, they are very different. If you want to know the difference between the two, you’ve come to the right place! We’ll discuss what fractional ownership is, as well as why some people purchase it. We’ll also compare the benefits of fractional ownership vs. timeshare ownership. Finally, we’ll share a few examples of fractional properties for sale on the resale market.
What is a Timeshare?
A timeshare is a property like a villa or suite, that is divided for multiple owners by time. Typically, owners have an entire week at their location, but depending on the type of timeshare, this can be split into smaller trips or extended for longer. These timeshares are typically found at timeshare resorts, which feature top-of-the-line amenities and accommodations. In fact, these suites are often over triple the size of your average hotel room. While hotels are a place to stay, timeshare resorts are more like a full home away from home.
Learn more: What is a Timeshare and How Does it Work?
What Is Fractional Ownership?
Fractional ownership in timeshare gives owners the opportunity to own multiple weeks at a vacation property. A few buyers own these properties, typically 6-12, who all own equal fractions of the title. Fraction size varies from 1/4th to 1/13th ownership options, with 1/4 being the most common. Timeshare units are usually split into 52 weeks, but fractional ownership properties are split into smaller sections. As a result, owners have the chance to visit the vacation unit for more time than the average timeshare stay, usually for five weeks or more per year. In addition, fractional properties are typically larger than a traditional timeshare villa and are oftentimes homes featuring 3-5 bedrooms.
When you purchase fractional ownership for sale, you obtain a deeded interest in the property. Buyers own partial equity in a valuable asset with fractional ownership. This means that as the property value appreciates, the value of the buyer’s equity does the same. Buyers can potentially use this kind of ownership as an investment. Should an owner sell their share, a net capital gain can be acquired. Buyers of fractional ownership property pay fees that cover property management, maintenance, taxes, insurance, and housekeeping.
Of course, these fees add to the overall cost of the purchase, but they also mean that owners have more control over their property. Property management companies take care of day-to-day operations and can also prepare the unit at the owner’s request. While owners may have more freedom to make choices about the property, those decisions need to be a group consensus. All of the owners of the property need to agree on everything from decorations to those who may or may not stay in the unit.
Fractional Ownership vs. Traditional Timeshare
While both fractional ownership and traditional timeshare provide guests with amazing vacation opportunities each year, there are some key differences between the two. To be clear, one type of ownership isn’t necessarily better than the other, but one may suit your preferences more. Below learn about fractional ownership vs. timeshare ownership.
Number Of Owners
As mentioned previously, the main difference is the number of owners per vacation property. Timeshares can have as many as 52 owners per unit, all of who gets to use the property one week out of the year. This can lead owners to have less of an emotional connection to their property. On the other hand, most fractional ownership properties have up to 12 owners per unit. The fact that fractional ownership properties have fewer owners means that each of these owners gets to spend more time at the property.
Costs
Of course, because owners spend more time at fractional properties than traditional timeshare units, they tend to be a bit more expensive. The fact that fractional ownership properties tend to be larger in size and have more amenities also plays a part in their higher price. With a higher price tag, fractional buyers often expect more luxurious amenities and accommodations. Resale value for timeshare properties also tends to lessen over time, whereas fractional properties may increase in resale value. Both types of ownership require owners to pay maintenance fees and taxes.
Renting Out Properties with Fractional Ownership vs. Timeshare
In both fractional ownership and traditional timeshare ownership, owners can rent out their unused weeks. If, for some reason, the owner isn’t able to use one/all of their weeks, they have the option of renting it out. Owners can also exchange their time at their property for a vacation at a new destination. Companies that provide this service include RCI for timeshare exchange and Third Home for fractional properties.
Want to know more about vacation exchange? Then check out our video, “RCI vs. Interval International: Vacation Exchange Showdown.”
Fractional Ownership Properties
The highly respected St. Regis Residence Clubs, Marriott Grand Residence Club, and Ritz-Carlton all offer fractional vacation ownership. These luxury ownership properties allow buyers to own a piece of property in some pretty incredible locales. From city getaways to island retreats, here are just a few fractional properties for sale where owners can relax luxuriously.
St. Regis Residence Club New York
St. Regis Residence Club New York is a highly sought-after and timeless property. The building is a historic landmark located on Manhattan’s esteemed 5th Avenue. Owning property at St. Regis New York comes with incredible amenities such as 24/7 butler service and exceptional concierge. In addition, outstanding dining at Astor Court, as well as the iconic King Cole Bar, make this flagship hotel a timeless luxury that reflects the elegance of St. Regis. Owners will experience the height of luxury at this Forbes Five-Star property.
Marriott Grand Residence At Lake Tahoe
Marriott Grand Residence At Lake Tahoe is in the heart of the Heavenly Village of scenic Lake Tahoe. This astounding Marriott resort is an upscale vacation destination for those that love to immerse themselves in nature. Families can enjoy their fractional ownership properties in any season, as Lake Tahoe offers incredible adventure year-round. Enjoy world-class skiing in the winter and go on breathtakingly beautiful hikes in the summer. Of course, Lake Tahoe is perfect for relaxing on a boat or for more adventurous watersports.
Ritz-Carlton St. Thomas
Ritz-Carlton St. Thomas is a luxurious resort full of pure tropical beauty. Enjoy views of sparkling blue waters and endless white-sand beaches without leaving the comfort of your villa. Let your worries float away at this elegant beach retreat. The resort features a full-service boutique spa and salon where you can be pampered by the Ritz-Carlton’s professional staff. This island getaway is perfect for a romantic vacation but also provides enough adventure for an unforgettable family vacation.
Ritz-Carlton San Francisco
When staying at Ritz-Carlton San Francisco, guests can relax and experience city life at the same time. Within walking distance, there are several restaurants and shops in Union Square, as well as the Financial District. Not to mention, throughout your stay, the hotel’s attentive staff and a 24-hour concierge will be at your disposal. Other amenities include a fitness center, valet parking, a spa, a private lounge, nightly turndown services as well as twice-daily housekeeping. In addition, becoming a fractional owner vs. a timeshare owner will allow you to explore this incredible city for a longer period of time.
Fractional Ownership vs Timeshare: Which is Better?
Now that you’ve seen some fractional ownership properties and read about the pros and cons, you’re likely wondering which in the debate between fractional ownership vs. timeshare is better. Ultimately, that’s up to you to decide! Both have their pros and cons, and it’s up to you to consider what you value most on your vacation. Whether it’s buying timeshares or fractional property for sale, Fidelity is here to help.
Fractional Ownership and Timeshare With Fidelity Real Estate
If you’re ready to purchase a fractional ownership timeshare on the resale market, Fidelity Real Estate is here to help. We’ve helped owners of fractional timeshares sell their real estate with ease. Or, if you’re looking to add on to your fractional ownership, you can do it for less with a resale. Feel free to check out our marketplace to find great fractional properties for sale. For more information, please contact us at 1-800-410-8326 or at [email protected]. Our team of real estate agents has the experience and knowledge to make the journey to fractional ownership easy!
